Mr Davies, an increasingly vociferous critic of the party since standing down as a member of the National Assembly last May, said Labour "wasn't performing" and that Welsh politics was "in a mess".

Although he supported the founding principles of Forward Wales, the new party formed by Wrexham AM Dr John Marek, he had not joined it.

Mr Davies said, "It seems to me that there is a huge void at the moment. You've got a Labour Party that isn't performing. You don't have a credible alternative with Plaid Cymru because they have got this commitment to independence. We're in a bit of a mess at the moment."

He said his move was not timed to coincide with this week's crucial tuition fees vote and the Hutton report. The decision to leave had been a difficult one. "I've been active in the Labour Party in one sense or another for the best part of 40 years. I don't take a decision like this lightly," he added.

"There's been a growing realisation on my part over the last couple of years on a Wales and UK level the party has drifted away from the basic commitment to reducing inequality. You never have 100% agreement with the party; there are some things that you disagree with. But it's moved so far to the right that balance has changed."